The War After the War

Every intelligent person now admits that the antagonism among the nations of Europe that led to competition of armaments and the present world war was fundamentally due to a universal desire to secure increased empires for the deposit of capital, the enslavement and robbery of the conquered races, and the monopoly of the oil, rubber, tin, and other products of the annexed territories. The economic rivalry of races was vividly brought before the people of Britain fifteen years ago by the late Mr Joseph Chamberlain, who tirelessly referred to the menacing growth of industry and commerce in Germany and the United States as a plea for a tariff war. The workers were asked to back up his tariff proposals as the only way to protect their jobs. The free traders used statistics and economic arguments in reply, and equally urged the workers to back them up if unemployment were to be avoided and the “prosperity of the country” maintained.

But all the time prices were rising whilst the free trade and the tariff capitalists refused even to consider a proportionate increase of wages to retain the old standard of living. Freeing themselves from the follies of tax jugglery, the workers went through a series of mammoth strikes from 1911 onwards, and were in readiness for others when the war broke out in August 1914. A growing knowledge of working-class economics gave them strength of argument to justify their proceedings. This same knowledge enabled the Clyde engineers to keep their head on the outbreak of war, so that when the “profiteers” and the patriotic house-owners raised prices and rents, and the government initiated dilution, strikes broke forth, always to retain the pre-war standard of living.

Britain has had conferences with her allies to prepare for an economic war against Germany and her supporters when “peace” has been attained, and even already the governing class of this country is appealing to the workers as did Chamberlain half a generation ago to hang on to their jobs by backing up their government’s future economic proposals for kicking in the stomach those “brutal Germans”. To establish “harmony” between the employers and the employed, attempts are being made to side-track the revolutionary shop stewards’ movement by applying the suggestions of the Whitley Report to the establishment of industrial councils, industrial parliaments, or industrial guilds, the main object being continuity of work or avoidance of strikes, increased output, with a show of partial shop control over trifling though irritating details, that nowise endangers the capitalist structure of society. This meeting of workers and employers to discuss economic problems will urge the workers to a deeper and deeper study of economics, and in anticipation of this the government is taking immediate steps to supply economic “dope”.

The Commissioners on Industrial Unrest have attributed the determination of the South Wales miners to their knowledge and teaching of marxian economics, or, as it is frequently called, independent working-class economics. They consequently haveurged the establishment of Workers’ Educational Association classes in South Wales as a counter-agent. A like attempt is being fostered in Scotland, but in the Clyde area this has so far been a miserable failure owing to marxism having too deep roots. Nevertheless, big attempts will be forthcoming to use the WEA to muddle the minds of the workers, as the secretary’s interview with King George is the conventional cue to the capitalist class.

Recognising this we make no apology in coming forth into the arena on the side of marxism, in the hope that this brief sketch of the fundamentals of marxian economics may get into the hands of hundreds of thousands of workers, and induce them to dig deeper at home, form study circles, or start classes on marxian lines. The fact that the capitalists and their government are deeply distressed over the growth of working-class students of Marx ought of itself to induce all workers to begin this fascinating study.

In shop windows we see millions of articles for sale, all at different prices. We are puzzled to know how these prices are arrived at, and so we watch the reports issued by the Food Controller. We find that he starts with the price to be charged by the producer or manufacturer, then he adds so much for the wholesaler, and finally some more for the retailer.

We, too, go back to the capitalist manufacturer and seek to find out how he arrives at the selling price of the commodity his workers produce for him, a pair of boots let us suppose. He may have to pay 10s for the leather, thread, and other materials needed to make the pair, and the selling price on the market may be 20s, an addition of 10s to that paid for the raw material.

How do he and his fellow boot manufacturers arrive at the 10s they add? He may offhand tell us that he allows 4s for wages, 1s for depreciation of property and plant, 1s for rates and taxes, 1s for rent, and 3s for profit, or something to that effect. That settles the matter for him as a “practical” man, but not for us who wish to get deeper. We wish to get down to the reason for the 4s for wages, and the 3s for profit.

Why do not he and his friends add 20s, and sell the pair at 30s? He might thus on the average pay 8s in wages and have 9s as profit? His reply would be quick and businesslike. It would be folly to pay out 8s instead of 4s in wages, as he can always get a plentiful supply of boot and shoe operatives at 4s. Since the men and their union seem to be satisfied why need he bother to throw away 4s in increased wages on every pair of boots? He would go further. He would show that the enlarged wage would raise the earnings of the operatives so high above those obtained by other grades of workers that there would be as great a rush from other industries into boot production as to Klondyke when gold was discovered on the borders of Alaska and British Columbia. The law of supply and demand would then begin to manifest itself by the men offering themselves for less and less, until the employer could even get them at an outlay of only 3s wages per pair.

Similarly with the profit. There are always hosts of keen businessmen anxious to invest money to the best advantage. As soon as these alert fellows heard of the huge profits “in boots” they would at once start companies to make boots. They would flood the market with boots, more than might be demanded in all likelihood. There would be ascramble to sell, and the same old law of supply and demand would make the price tumble even below 20s per pair. A reduced output would in the end bring prices up again to 20s. The employer knows that there is a normal price that enables him to obtain the normal profit after paying the normal wage.

The problem is to find out why the boots sell at this normal price of 20s, or at a sovereign which weighs about a quarter of an ounce of gold. We can better approach the subject by comparing the boots with a hat likewise selling at 20s. There surely must be something common to the boots and the hat, giving them each the same exchange value. Both are useful, but we are not entitled to assert that they are equally useful since we have no means of measuring and comparing their respective uses. Practical experience shows us that frequently the price of an article is reduced the more of it that is used; and surely no one would assert that the increased use of an article implies that it is less useful than when less of it was in demand; for rather are we inclined to maintain that the demand increases with the usefulness of the article. In every article produced in the workshop, extracted from the mine, or grown in the field there is something else locked up, and that is labour. All must admit that the articles most easily produced are the cheapest, hence that there must be a closer connection between labour and price than between usefulness and price.

We assert that the labour spent in producing a hat constitutes the value of the hat. If a hat on the average takes four hours to make, then the hat has four hours’ value; so also with the pair of boots if made in four hours. They have the same price, and exchange for one another because each contains the same amount of value.

It will be noted that the value is simply the labour locked up in a commodity, and is measured by the hour. Under normal conditions ten hours’ worth of bread will exchange for ten hours’ worth of any other commodity, gold included. If 120 loaves contain ten hours of labour, and half an ounce of gold contains ten hours of labour, then under normal conditions 120 loaves will be worth the half ounce of gold or £2; or a loaf will sell at 4d.

We here include the money commodity, gold, in the same category as other commodities and subject to the same law of value. If the loaf sells at 4d, we call the 4d the price of the loaf. It is quite clear that the normal price of the loaf or any other commodity is its value expressed in the money commodity rather than in labour-hours.

The term “normal price” is used advisedly, as everyone is aware that the price of all articles may suddenly rise or as suddenly fall without any visible change in the time taken to produce them. In 1910 the price of rubber rose from 3s 9d to 12s 6d per lb owing to the great demand for rubber for motor tyres and the covering of electrical plant. The profits of some rubber companies rose to 200 per cent per annum as a consequence. This attracted the attention of financiers and company promoters, and very soon millions of capital were thrown into the rubber growing industry in plantations in South America, Central Africa, India, Ceylon, etc.

In time the rubber output increased and the price has fallen to the old level and even below it to 2s 6d. The same happened in the case of oil for motors. It ought to be noted that this rush to the torrid zone for raw materials was one of the many economic factorsleading to the feverish secret diplomacy that ultimately landed Europe in the present world war.

The point is that new capital enters those industries yielding the largest profits, that the output is increased, and that by the operation of the law of supply and demand the prices fall to and even below the normal prices, agreeing with the time taken to produce them.

The money market is the central market and all other markets are knit up with it. The masters of the money market see that each industry tends to get its proportion of capital, and it is this regulating factor that keeps prices swinging above and below the normal prices. In the game of “see-saw” the boy on the middle of the plank can regulate its ups and downs by throwing his weight now to this, now to that side. He influences the plank in the same way as the masters of the money market influence prices. Although prices seldom or never touch the normal we are as entitled to use the term normal price as the term sea level, although the surface of the sea incessantly rises and falls with the flow and the ebb of the tide.

Statements without proofs are often valueless, so that to gain acceptance of the labour-time theory of value the following suggestions are given, as well as to enable workers to discover proofs within the range of their own experience.

Every well-regulated firm has a costing department. If the estimated cost of a machine has to be made, the costing clerk finds out the time taken to do each part of the work, and then calculates the cost per part, allowance being made for on-cost. On-cost includes part of the wages of foremen, clerks, managers, outlay on heat, light, material used, and depreciation. The point is that the cost is based on the time estimate of the job.

“Scientific management” is the resort to any and every scientific expedient to increase output, or, to put it another way, to reduce the time taken to do a piece of work or turn out the completed commodity. Scientific management was undoubtedly more thoroughly applied in the United States than in the British empire prior to the war, the hindrance in the empire being largely due to the conservatism of the capitalists and the “ca’ canny” policy of the powerful trade unions.

The war was not long started when the British capitalists realised that they had miscalculated the war strength and capacity of Germany. They got engineers, shipbuilders, boot-makers, clothes-makers, and other war workers to agree to long hours of overtime, and they at the same time appealed to them in the name of Kitchener, Roberts, French, Jellicoe, Lloyd George, and others to turn out more per hour. The willing slaves of Britain, ever ready to oblige their masters, tried their best, but failed. Long hours and increased output cannot go together for any length of time; fatigue breaks both spirit and health, the essentials for increased output. The government had to set up a Health of Munition Workers’ Committee and now Dr Addison, the Minister of Reconstruction, is urging the capitalists to reduce hours as a means of increasing output. He is citing the now famous case of women whose hours per week were reduced from 66 to 54.8 and to 45.6, and whose output per hour rose from 100 to 134 and to 158. These women are turning out in 45 hours 9 per cent morethan in the 66 hours. A reduction of boys’ hours from 72 to 53 per week has resulted in the output per hour rising from 100 to 129; and of men’s (at heavy work) from 58 to 51, resulting in a rise from 100 to 139.

Taking these and similar results, Lord Leverhulme (Sunlight Soap) is now accepting Tom Mann’s six-hour day proposal as a method of further increasing output in mechanical industries. No one can doubt the ability of this soap lord to exploit the workers. The government is now experimenting with a 50-hour week in a munition factory.

The whole object of the “welfare work” organisation is to help in keeping the workers up to the highest pitch of “efficiency”; and “efficiency” is now coming to be understood as meaning “the output per hour”.

Just as the employers pressed the workers to toil harder, the government forced the trade-union leaders to abandon all trade-union restrictions for the war, after which pre-war conditions would be established. Now, however, we are being told that the economic war on the return of the peace will preclude all possibility of returning to pre-war methods. As a matter of fact, the government has adopted and is beginning to apply the Whitley Report proposal of joint meetings of workshop committees and owners, of district committees and representatives of owners, and of national councils or parliaments representative of the masters and their wage-slaves, for the purpose of establishing “harmony” and “increase of output”. The “harmony” in theory means that for the complete abandonment of all trade-union restrictions and taking an interest in the industry the masters may reduce hours and increase real, as well as money, wages. In other words, the government intends to use the workshop movement in the interests of the capitalist class. The government has no alternative in the matter, because it is a capitalist government. The war debt is increasing and may easily rise to ten thousand million pounds. At 5 per cent, this means that the government realises that to save British capitalism from bankruptcy it must have the workers turn out far more wealth per hour, and therefore per year, so that from them can be taken the increase to pay its extra liabilities, if not by direct taxation of wages at any rate by taxation of “normal” or “surplus” profits.

The solution of the question “Eclipse or Empire?” does not only depend on the application of the Whitley Report and scientific supervision. Capitalists are being urged by the government to adopt any system of “payment by results”, or, as it has been called, “ability pay”. Among such expedients are the individual piecework, the collective piecework, the departmental contract, the premium bonus, and the profit-sharing systems. To make a higher wage than under the time system the worker toils harder under all these others: his “efficiency” is increased. The piece rate or the time allowed may be broken, and under the profit-sharing system the books can be manipulated so as to show decreased profits, or the capital may be watered to absorb more of the rate of profit on capital, in order to still further speed up the output at a lower outlay in wages. It is the donkey and the carrot applied to Mr Henry Dubb, the highly respectable working man found everywhere. In The Efficiency Magazine for October 1917, the docile Henry is not even compared with the donkey, but with the cow. “If cows can be developed so as to give three times as much milk, is it not possible to train employees so that the output will be multiplied by three?” But the artful writer, knowing his Henry,suggests to his fellow capitalists to write these words over the doors of their shops and factories:

Increased efficiency does not depend solely on the “live machines”, the “human cows”, but on increasing sub-division of labour, the use of better machinery, applied science, use of waste material, trustification, improved office and business methods, etc. By their superiority in this respect the Americans could in 1909 turn out about three times as much per worker as we here in Britain. For some of the comparative statistics read Gray and Turner’s Eclipse or Empire? These writers prove that in many industries American machinery is better than British, and that each American worker uses three times the horsepower handled by his British brother. Huge companies and trusts have a vast output and can therefore afford to carry sub-division of labour to an extreme extent, if accompanied by standardisation of parts and of the finished commodity. It is asserted that in Chicago each bullock passes through the hands of about a thousand workers before it is packed up in cans for the soldiers at the front. The pace of the operators is regulated by the rate of motion of the chain from which the live animal is suspended. In the assembling of motor parts to form the completed motor car the Ford Company fixes the chassis on a travelling platform, and in its journey of 3 ½ hours a succession of fitters put on and screw up the various parts needed to finish the car.

Along with division of labour goes adaptation of tools and specialised automatic machines. One feature of the revolution inside the munition factories is the introduction of American single-purpose automatic machines enabling unskilled male and female labour to turn out twice or thrice as much as was formerly done by skilled artisans using less efficient methods and machinery. Besides, continual improvements are being made with labour-time saving effects. A worker informs me that he was turning out 45 copper bands for 18-pounders per day, when, by the introduction of a “forming tool”, he turned out 80 per day. As an incentive to effort his wage was reduced from 15s to 11s per day! A friend of his was tracing holes on 4-inch shells and put 50 through his hands per day. By the introduction of a “combination tool” he was able to handle 100 per day. This worker’s daily wage fell also—from 15s 7d to 13s per day! […]

To encourage and hasten the dilution of labour by the introduction of women into munition works, the government in October 1916 started the Dilution of Labour Bulletin. In the issue of November 1917, attention is drawn to a “record” in assembling no.101 fuses at the rate of 105 to 110 per hour in a West Midland factory; also to the fact that in a London and South Eastern district aeroplane shop “five women are now doing the work of scraping (propellers), formerly done by six men, with an increase of 70 per cent in output”[…]

The following words form part of an advertisement by Alfred Herbert Ltd, Coventry, in the issue of the firm’s Monthly Review for August-September 1917: “Today’s problem is how to turn the work out in less time.” This is a conscious recognition (in big type, too) of the marxian theory of value, that labour-time is the all-important element in production, and constitutes the value of each article produced[…]

That there is no finality to the application of science or the invention of labour-saving machinery and appliances is now so well recognised by the capitalists that we find their government organising research and experimental departments, preparing for improved technical training of apprentices and journeymen, and encouraging the capitalists to do the same individually and collectively. The government is also urging trustification of industries, as this unification is a prerequisite of improved output in every way. Its appeal is: “Capitalists of the empire, unite! You have nothing but an empire to lose, you have a world to win!”

The labour-time theory of value applies to the worker’s commodity, his labour-power. Note carefully that the worker does not sell his labour, but his ability, force, or power to labour—his labour-power. Labour is the using of labour-power. To understand the difference let us take the case of the watch. The wound-up mainspring has a stored-up energy or power. This we may compare to labour-power. The mainspring keeps the wheels and hands of the watch in motion; the energy stored up in the spring is being used up in keeping the mechanism in motion. This motion we may compare to labour.

The capitalist class is conscious that it purchases labour-power and not labour, although its defenders in public would have the workers imagine it pays for every hour of labour worked or every commodity created.

Dr D. Noel Paton, introducing a Report upon a Study of the Diet of the Labouring Classes in the City of Glasgow (1911-12), says: “Under natural conditions of trade, the working man brings into the market his energy—his power of doing work—and obtains for it the most favourable price he can secure…Food is the fuel—the source of energy—the human machine…An abundance of cheap and good food is the first essential for a productive working class.” The object of the Study is thus in the report proper: “Do the working classes get an adequate and suitable diet, and, if not, can any improvement be suggested without unduly increasing the cost?” The problem is one of “scientific management” in the home to enable the producers to get the maximum of energy at the minimum of cost so as to enable the capitalists to purchase their supplies of labour-power at the minimum price, the lowest wage; for wage is the price paid for the commodity called labour-power. The value of one labour-power is determined by the time taken to produce the food, clothing, shelter, education etc., needed to keep the average family of five. This, translated into ordinary language and money, is called the “cost of living”.

During strikes for increased wages capitalist flunkeys rush into the papers with letters showing how little a family can live upon, and urging therefrom that the workers ought to be content with the old wage rates. During the unrest prior to the war, Cassell’s Magazine of Fiction published an article by Mr F. J. Cross entitled “How to Live on 3d or 4d a Day”. Other flunkeys urge that if the workers got more they would become drunkards, “immoral”. The argument in the latter case is that the capitalists are justified in maintaining wages at the “cost of living” level to keep the workers “good”.

That many families do not even get a “subsistence wage” has been proved by investigations made by Booth in London, Rowntree in York, Noel Paton in Edinburgh, and Dorothy Lindsay in Glasgow. Adults getting less than 3,000 calories of energy are living below subsistence level, below the minimum “living wage”, are in fact not gettingthe value of their labour-power. It has been demonstrated that one in three of the working class is on or below the “poverty line”—the “poverty line” meaning the lowest level on which the workers can normally live and work. The Glasgow Report states that “of the families whose weekly income is under 20s or irregular, 62.5 per cent have a diet the energy of which is less than 3,000 calories”; and that “not one of the families in which the wage is regular and below 20s has a diet the energy value of which reaches the minimum of 3,000 calories”.

The rise in the cost of living since 1896 and especially since the start of the war has tightened the corner in which the capitalists keep the workers. As illustrative of this increase the following instance will suffice. The Board of Trade found that the average food outlay of 1944 families was 22s 6d per week in 1904, 25s at the start of the war, and 52s 3d in September 1917. It would not be exceeding the truth to say that not one in ten working-class families has added 30s to the weekly income in normal wage increases since 1904. Undoubtedly, overtime has come to the rescue of many, and increased wages due to excessive work have staved off the acuter forms of starvation. However, this but serves to accentuate the evil of wages that fall below the subsistence level.

Skilled workers, well organised in trade unions, have undoubtedly in the past had a margin over and above the bare animal living, but much of this margin has vanished with increased prices during the war period. From facts gathered I conclude that skilled workers’ wages have not increased in the same proportion as labourers’ wages, it being necessary to give the labourers a greater percentage of a rise to prevent actual starvation. The tendency for the living of the organised workers to fall to the bare animal level has been largely responsible for the “unrest” prior to and during the war.

To crush the arguments of the trade unionists and other working-class fighters of the first half of the nineteenth century, capitalist professors of economics tried to prove the “wages fund” theory. They showed, to the satisfaction of their capitalist paymasters, that out of each year’s wealth product only a fixed amount could be given as wages. Worked out in detail, this meant that if the workers got 5s on to their wages, the cost of living would rise 5s too, and so no gain would be derived by the workers. This was called “the iron law of wages” or “the brazen (brazen-faced) law of wages”. Although abandoned in theory, it crops up continually during every strike in the assertion that prices rise when wages rise; in other words, that prices depend on wages.

From about 1875 till 1896 prices tended to fall whilst wages tended to rise, and from 1900 onwards prices have risen enormously whilst wages tended downwards until the huge strikes and tremendous agitation generally checked the drop. That should kill the lie that prices depend on wages. As a matter of fact the application of “scientific management” shows that wages can be increased, prices reduced, and yet greater profits can be realised by the capitalists.

Whilst the tendency is for wages to fall to the bare animal existence level, yet hosts of workers get above this by organisation and fighting the “huns at home”. The better the organisation, and the stronger the fight, the greater the chance of the workers to keep their standard of living above the animal level.

Some capitalists have found out, e.g. Cadbury, Rowntree, and Lord Leverhulme, that a certain standard of comfort above the animal level increases efficiency, and is therefore advantageous to them. These are urging their class to adopt the policy of “enlightened capitalism” to save capitalism from the establishment of a socialist republic.

We are justified in concluding that the workers are paid for their labour-power and not for their labour. The workers create far more wealth than they possibly can get in the form of wages, despite all the fighting that ever could be put up by them, because of the operation of the law of value. Statistics prove this difference between the wealth created and obtained by the workers. The government’s Census of Production taken in 1909 shows that 6,936,000 workers (roughly, seven million) created £712,000,000 worth of new value; in other words, each worker, young or old, male or female, created on the average more than £2 a week. The government’s Census of Wages, taken in 1906 and 1907, shows that 7,277,056 workers got a rate of wages of from 9s 3d to 27s 4d per week, these being averages for all kinds of workers from the worst paid industry (agriculture) to the best paid (metal). The general average is certainly below £1 a week, when all broken time is taken into consideration. The difference between the estimated value created per annum and the part taken by the income-tax-paying class gives further confirmation of the extent of the gulf between the value created by labour and the value of labour-power (see Chiozza Money’s “Riches and Poverty”).

An American census of production in 1909 reveals that the value created per worker is between two and three times as great as that created by the British worker. Hence the universal urge now on in Britain to adopt every German and American method that will increase the output, in order to enable the difference between what the worker makes and gets—the surplus value—to be all the greater. The greater this surplus value, the easier will it be for the capitalists to pay the heavier taxes needed to meet the war charges, and yet live more luxuriously and invest more capital than ever before. This can be accomplished whilst the workers get higher wages and work shorter hours, if they but settle down to toil continuously and obediently under the industrial councils or parliaments suggested in the treacherous Whitley Report and approved of by the government.

Suppose a worker makes 200 commodities in a ten-hour day and these sell at 10s, that the worker gets 5s as his wage. The surplus value would be 5s, on the assumption that nothing is allowed for the cost of raw material, depreciation, etc. If, however, the output be doubled, the worker could turn out 360 commodities in a nine-hour day, and these might sell at 18s. The worker might get 6s a day, so that still the surplus value would be 12s. If the capitalist arranged to keep his plant going continuously, then he could easily run three shifts at least instead of two, and so gain 36s instead of 24s, a greater surplus value than ever before. A knowledge of this is actuating Lord Leverhulme to urge with Tom Mann the six-hour day.

Workers may now be able to grasp the full meaning of the chorus of the platform and press—living gramophones, harmony and efficiency.

The increased output of commodities, and especially of that part called capital, will necessitate larger markets abroad, and hence a larger empire.

The same will apply to other capitalist countries. This must develop a more intense economic war than led up to the present war, and so precipitate the world into a bloodier business than we are steeped in just now. The temporary advantage the workers may get in shorter hours and higher wages with higher purchasing power will then be swept away in the destruction of millions of good lives and fabulous masses of wealth.

We see preparations for this economic war, this war after the war, in the establishment by the government of a Commercial Intelligence Department, partly connected with the Board of Trade, and partly with the Foreign Office, which shall work hand in hand with the growing industrial trusts for the monopoly of markets outside the empire. Every other capitalist country is doing the same, especially the United States, which has now definitely passed from being a borrowing to being a lending country. It is getting a foothold just now in South and Central America, and is manoeuvring with Japan for a firmer grip over the economic life of China. It will not take long for China to become a fully equipped capitalist country, entering the world’s competitive market with floods of surplus commodities.

It is perfectly obvious that to avoid a recurrence of the present world crash on a more huge scale than before, the need for dumping each nation’s surplus on undeveloped countries must be avoided by eliminating this surplus. As this surplus is due to the workers having to sell their labour-power as a commodity to the owners of land and capital, it is necessary that the need to sell labour-power to anyone must be abolished. This can solely be accomplished by the ending of the class ownership of land and capital, by the people taking full possession of the whole means of living and using them co-operatively for wealth-creative purposes. Under such circumstances alone will it be abolished, and for national antagonism and world wars to be stamped out for ever. The Bolsheviks in Russia have given the world the lead.

If this brief, elementary and preliminary sketch of the fundamentals of economics demonstrates the all-importance of the subject in connection with the vital affairs and issues of life, and incites the reader to dip deeper into the subject privately, in study circles with kindred spirits, or in independent educational classes organised by working-class bodies, then it will have achieved its primary purpose.

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